Rupee at 80 to the dollar: IT services and tech industry to get a leg up

As the rupee touches 80 to the dollar, the extent of gains for Indian companies may differ basis their exposure to non-US regions and the performance of their currencies

The Indian IT services and technology industry has been the biggest gainer of a depreciating rupee as it earns in US dollars and other foreign currencies. Since the US contributes more than 50 per cent of the revenue, any fall in the rupee increases their earnings.

This also aids their margin performance. A 100-basis point (bp) fall in rupee against the US dollar means a 30 bp operating margins benefit.

However, the US dollar strengthening versus other currencies like GBP, Euro, Yen, and Australian Dollar negatively impacts the Indian information technology (IT) services industry. After the US, UK and Europe